Is Equinix Stock Now Attractive After a 21% Year to Date Decline in 2025

• If you have been wondering whether Equinix at around $744 a share is a bargain or a value trap, you are not alone. This article is going to walk through what the numbers are really saying.
• The stock is down about 0.8% over the last week and 2.7% over the last month, adding to a tougher stretch with returns of roughly 21.2% lower year to date and 17.9% lower over the past year, even though it is still up 20.4% over three years and 16.1% over five years.
• That mixed performance comes as investors digest ongoing data center demand, the growing importance of interconnection services, and broader debates about how much to pay for digital infrastructure platforms. At the same time, sector wide conversations about interest rates, capital intensity, and long term AI driven traffic growth are shaping how the market prices Equinix relative to other real estate and tech names.
• On our checks, Equinix scores a 3 out of 6 valuation score, meaning it looks undervalued on roughly half of the metrics we track. In the rest of this article we will unpack what different valuation approaches say about that number, before ending with an even more intuitive way to think about what the stock is really worth.

Find out why Equinix's -17.9% return over the last year is lagging behind its peers.

Approach 1: Equinix Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth today by projecting its future adjusted funds from operations, then discounting those cash flows back to a present value in $.

For Equinix, the model starts with last twelve months free cash flow of about $3.36 billion and then applies analyst forecasts and extrapolations. Analysts see FCF rising to roughly $4.06 billion by 2026, with Simply Wall St extending that trajectory to around $7.54 billion by 2035 as data center demand and interconnection services continue to scale.

Aggregating and discounting these projected cash flows under a 2 stage Free Cash Flow to Equity framework produces an estimated intrinsic value of about $1,247 per share. Compared with the current share price near $744, the DCF indicates that Equinix is trading at roughly a 40.3% discount. This suggests that the market is assigning a much lower value to its long term cash generation than the model implies.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Equinix is undervalued by 40.3%. Track this in your watchlist or portfolio, or discover 917 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Equinix.

Approach 2: Equinix Price vs Earnings

For profitable companies like Equinix, the price to earnings ratio is a useful way to gauge how much investors are willing to pay today for each dollar of current earnings. A higher PE can be justified when a business has stronger growth prospects or lower perceived risk, while slower growth or higher uncertainty typically warrant a lower, more conservative multiple.

Equinix currently trades on a PE of about 68.2x, which is well above the Specialized REITs industry average of roughly 16.5x and also above the broader peer group average of around 29.8x. On the surface, that kind of gap suggests the market is already baking in a premium for Equinix’s scale, strategic assets, and growth profile.

Simply Wall St’s Fair Ratio framework refines this comparison by estimating what a “normal” PE should be for Equinix given its earnings growth outlook, margins, industry, market cap, and risk profile. On that basis, the Fair Ratio for Equinix is about 33.7x, which is far below the current 68.2x. This points to the stock trading at a significantly richer valuation than its fundamentals and risk adjusted profile would typically support.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1455 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Equinix Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. This is a simple way to attach your own story about Equinix’s future revenue, earnings and margins to a financial forecast, turn that into a Fair Value, and then compare that Fair Value with today’s share price in an easy to use tool on Simply Wall St’s Community page, where millions of investors share views. For example, one investor might build a bullish Equinix Narrative using the high end of analyst expectations and a Fair Value near $1,200, while another might focus on execution and capital intensity risks, lean on the low end around $804, and both of their Narratives will automatically update as new news, earnings and sector data arrive, giving each a dynamic, story driven way to decide whether Equinix looks like a buy, hold or sell for them right now.

Do you think there's more to the story for Equinix? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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